XML 50 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Share-based Compensation Share-based Compensation (Notes) | 9 Months Ended
--- | ---
Mar. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | Share-based Compensation On August 23, 2007, the Company’s Board of Directors approved the Farmer Bros. Co. 2007 Omnibus Plan (the “Omnibus Plan”), which was approved by stockholders on December 6, 2007. On December 6, 2012, the stockholders approved an amendment to increase the maximum number of shares of common stock available for issuance under the Omnibus Plan to 1,125,000 from 1,000,000, subject to adjustment as provided in the Omnibus Plan. The Company measures and recognizes compensation expense for all share-based payment awards made under the Omnibus Plan based on estimated fair values. Stock Options During the nine months ended March 31, 2013, the Company granted a total of 163,446 shares issuable upon the exercise of non-qualified stock options with a weighted average exercise price of $11.85 per share to eligible employees and officers under the Omnibus Plan. Shares issuable under the options vest ratably over a three-year period. Following are the weighted average assumptions used in the Black-Scholes valuation model for the grants issued during the nine months ended March 31, 2013 and 2012:
| Nine Months Ended March 31,
| 2013 |  | 2012
Weighted average fair value of options | $5.56 |  | $4.74
Risk-free interest rate | 0.8% |  | 1.1%
Dividend yield | — |  | —
Average expected life | 6 years |  | 6 years
Expected stock price volatility | 49.5% |  | 52.5%
The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s consolidated statements of operations. Compensation expense recognized for all stock option awards is recognized using the straight-line method over the vesting period. The options generally vest ratably over a three-year period, however, fiscal 2012 grants included nonqualified stock option awards to executive officers with different vesting periods, in each case, subject to certain events of acceleration as provided in the applicable employment agreement or award agreement with the executive officer. The share-based compensation expense recognized in the Company’s consolidated statements of operations for the three and nine months ended March 31, 2013 and 2012 is based on awards ultimately expected to vest. Currently, management estimates an annual forfeiture rate of 6.5% based on actual forfeiture experience from the inception of the Omnibus Plan. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses the Black-Scholes option valuation model, which requires management to make certain assumptions for estimating the fair value of stock options at the date of grant. The Company’s assumption regarding expected stock price volatility is based on the historical volatility of the Company’s stock price. The risk-free interest rate is based on U.S. Treasury zero-coupon issues at the date of grant with a remaining term equal to the expected life of the stock options. The average expected life is based on the midpoint between the vesting date and the end of the contractual term of the award. The following table summarizes stock option activity for the nine months ended March 31, 2013 (unaudited):
Outstanding Stock Options |  | Number of Stock Options |  | Weighted Average Exercise Price ($) |  | Weighted Average Grant Date Fair Value ($) |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding at June 30, 2012 |  | 667,235 |  |  | 12.84 |  | 4.78 |  | 4.8 |  | 143 |
Granted |  | 163,446 |  |  | 11.85 |  | 5.56 |  | 6.7 |  | 465 |
Exercised |  | (116,471 | ) |  | 10.27 |  | 5.24 |  | — |  | — |
Cancelled/forfeited |  | (147,122 | ) |  | 13.21 |  | 5.75 |  | — |  | — |
Outstanding at March 31, 2013 |  | 567,088 |  |  | 12.99 |  | 5.46 |  | 5.1 |  | 1,875 |
Vested and exercisable, March 31, 2013 |  | 244,851 |  |  | 16.66 |  | 6.26 |  | 3.5 |  | 356 |
Vested and expected to vest, March 31, 2013 |  | 537,471 |  |  | 13.13 |  | 5.49 |  | 5.0 |  | 1,745 |
The aggregate intrinsic values in the table above represent the total pretax intrinsic value, based on the Company’s closing stock price of $14.70 at March 28, 2013, representing the last trading day of the fiscal quarter ended March 31, 2013, which would have been received by award holders had all award holders exercised their awards that were in-the-money as of that date. Total fair value of options vested during the nine months ended March 31, 2013 was $0.9 million. During the three and nine months ended March 31, 2013, the Company received $1.2 million in proceeds from exercises of vested options. As of March 31, 2013 and 2012, there was approximately $1.3 million and $1.9 million, respectively, of unrecognized compensation cost related to stock options. Compensation expense recognized in general and administrative expenses in the three and nine months ended March 31, 2013 was $0.2 million and $0.7 million, respectively. Compensation expense recognized in general and administrative expenses for the three and nine months ended March 31, 2012 was $0.4 million and $1.0 million, respectively. Restricted Stock During the nine months ended March 31, 2013, the Company granted a total of 45,230 shares of restricted stock with a weighted average grant date fair value of $11.42 per share. Shares of restricted stock generally vest on the third anniversary of the date of grant for employees, including officers. Shares of restricted stock generally vest ratably over a three-year period for directors and officers who are not employees. Fiscal 2012 grants included certain awards to executive officers with different vesting periods, in each case, subject to accelerated vesting as provided in the applicable employment agreement or award agreement with the executive officer. Compensation expense is recognized on a straight-line basis over the service period based on the estimated fair value of the restricted stock. Compensation expense recognized in general and administrative expenses was $0.1 million and $0.2 million, for the three months ended March 31, 2013 and 2012, respectively. Compensation expense recognized in general and administrative expenses was $0.6 million and $0.4 million, for the nine months ended March 31, 2013 and 2012, respectively. As of March 31, 2013 and 2012, there was approximately $1.0 million and $1.3 million, respectively, of unrecognized compensation cost related to restricted stock. The following table summarizes restricted stock activity for the nine months ended March 31, 2013 (unaudited):
Outstanding and Nonvested Restricted Stock Awards |  | Shares Awarded |  | Weighted Average Grant Date Fair Value ($) |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding June 30, 2012 |  | 175,947 |  |  | 10.16 |  |  | 1.9 |  | 1,401 |
Granted |  | 45,230 |  |  | 11.42 |  |  | 2.6 |  | 516 |
Vested |  | (50,085 | ) |  | 12.52 |  |  | — |  | 638 |
Cancelled/forfeited |  | (21,104 | ) |  | 12.34 |  |  | — |  | — |
Outstanding at March 31, 2013 |  | 149,988 |  |  | 9.45 |  |  | 2.0 |  | 2,205 |
Expected to vest, March 31, 2013 |  | 127,128 |  |  | 9.41 |  |  | 1.9 |  | 1,869 |

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration